These
activities improve the availability and quality of affordable
rental housing, as well as strengthen existing neighborhoods
through the improvement of current rental housing stock and
management. The activities generally help agencies acquire
and/or renovate affordable rental housing units and use the
housing as a base for other neighborhood improvement activities
or create affordable rental opportunities in areas of the City
where few such opportunities now exist. The activities in this category include
acquisition and/or rehabilitation. These activities address
Objective C in the Five-Year Plan and generally benefit
households with incomes 50% of median or less.

One
objective of some of these activities is to expand the supply of
rental housing for those with special needs into areas of the
larger community (and the County) where few such housing units
exist. The national benchmark is to minimize the number of census
tracts with concentrations of households with poverty level
incomes greater than 40% of the census tract population. Local
benchmarks are stated in the Fair Share Inventory and the
Consolidated Plan. The positive statement of this benchmark is to
increase the economic diversity of census tracts where less than
25% of the households are low- and moderate-income.

Some
of these activities also improve the existing stock and the
availability of special needs housing units, particularly in
areas of the City (and, for some funds, the County) where such
housing does not currently exist, or helps eligible households to
afford such housing through direct subsidies. These activities generally help non-profit agencies to acquire and/or renovate
housing which combines supportive services for particular
populations, such as homeless persons or persons with AIDS. These
activities address Objective C in the Five-Year Plan and
generally benefit households at 30% of the median income or less. Construction
of new units will generally be assisted only in the Scattered Site areas in
order to meet the intent of the fair share goals.

Funds
will be applied to the acquisition, construction or rehab of
permanent or transitional rental housing with rents at HOME rent levels, or
equal to or below
85% of the area's Fair Market Rent.

The 2007 objective is to
either construct or bring a total of 28 units to code in a
manner which makes them affordable and supports neighborhood
activities, as well as assist 250 households into more stable or
improved rental situations.

For
information on how to submit a proposal in this category, click here.

Preferences

The Commission
will give preference to activities which provide housing for households
with incomes less than 50% of the area's median income, or create new
units through new construction or conversion of commercial properties to rental
units.

Conditions

Funds may
generally be used only for housing units that do not exceed the HOME
purchase price or value limit designated by the Federal Department of
Housing and Urban Development (HUD). For non-HOME funded activities, CD
Office staff may recommend and the CDBG Commission may approve individual
exceptions in cases involving hardship or in cases involving housing built
as part of the City's Inclusionary Zoning requirements.

Housing
(after rehab) shall comply with all applicable City
minimum housing and building codes.

The CD Office
will consider an investment of up to a level of $51,000 per housing unit
(approximately 24% of the HOME single-family value limit, a benchmark
standard that will change over time), and will evaluate all proposals based
on the activity's contribution and "value added" to increase the
housing stock, upon activity need, and availability of resources to
determine the appropriate level of funding. The CD Office will give
consideration to the higher end of this $51,000 limit per unit when the
proposal meets the preferences stated above (provides
housing for households with incomes less than 50% of median, and offers new
rental units through construction or conversion of commercial property to housing).

Activities which incorporate accessibility into the design, involve lead
paint reduction, or assure a period of housing affordability that is greater than HOME
affordability requirements shall be considered for amounts greater than
$51,000 per unit based on increased costs to provide these features, up to a
maximum total of $56,000 per unit.

This maximum sum of $56,000 per unit will include the total of all funds
provided by the CD Office including, but not limited to, CDBG, HOME, Housing
Trust Fund, EDI, and TIF 10% set-aside. The CD Office may also offer a higher
amount per unit as temporary financing to reduce holding costs. Activities
meeting the criteria of the Scattered Site Fund may be eligible for an
additional subsidy as an incentive to locate
particular types of housing in areas of the City that do not have a high
concentration of lower income housing.

Newly
constructed housing activities will be limited to the development of a total
of 16 or fewer units unless

located in
areas of the City which do not have a high concentration of lower income
housing;

are part
of a larger neighborhood revitalization effort; or

the
housing developer demonstrates that a smaller scale activity that
otherwise meets the objectives within the Program Framework would not be
economically feasible.

Activities may not
exceed a total secured funds-to-value ratio greater than 115% from all sources.

A minimum of 85%
of all funds received shall be applied to capital costs including acquisition
and closing costs, rehabilitation, labor and materials, design and engineering
costs, and relocation costs. A maximum of 15% of the total CD Office funds
received may be applied to staffing and other service delivery costs.

The CD Office
shall secure its funding for capital costs with a mortgage in the form of
a non-recourse loan. Funds will be provided in the form of a
long-term deferred loan payable upon sale of the property or
change in the use of the property. The mortgage will require a repayment equal
to the amount of CD Office funds invested, or the percent of appraised value
which the CD Office funds represent in the value of the property, whichever
is higher.

All
activities must comply with the relevant funding source
requirements. The CD Office will require that HOME-funded
activities comply with the regulations in 24 CFR Part 92. The CD Office will require that ESG-funded housing activities comply
with ESG requirements and be designed to serve homeless
individuals as defined in 24 CFR 576. Activities must be designed to contribute
a 50/50 in-kind or cash match for all ESG funds awarded.

The
Commission will assist ESG activities which support a continuum of
care strategy, and give priority for ESG funds to those activities which help expand the supply of transitional
housing. Buildings using ESG funds
for minor rehab must be maintained as transitional housing or as a shelter for the
homeless for not less than a three-year period; if the
the funds are used for major rehab, for not less than a
ten-year period.

Note for
Community Housing Development Organization (CHDO) Housing: 15% of the
aggregate HOME funds available to the City are reserved for activities
administered by agencies which meet the HUD definition of a Community
Housing Development Organization (CHDO), as defined in 24 CFR Part 92. The
City may consider appropriate CHDO-sponsored, -managed, or -owned activities
for predevelopment or technical assistance loans.